AUGUSTA – State House Republicans went on the attack Friday, demanding a full investigation of the Department of Human Services a day after the State Auditor’s Office announced it could not account for $19 million earmarked for poor Maine families.

On Thursday, Gail Chase, state auditor, said her office had not been able to identify a paper or electronic trail for $19 million of the federal funds the state received for its Temporary Assistance to Needy Families program.

She and Peter Walsh, the acting DHS commissioner, traced the origins of the major accounting headache back five years when the department started using the TANF money for assistance programs not specifically approved by the federal government.

It was, according to the GOP, exactly the type of situation that could have been avoided had the Office of Program Evaluation and Government Accountability been in place. Created last year by the Legislature, the program was axed by the Democratically controlled Legislative Council this year, and was not reinstated by Democratic Gov. John E. Baldacci in his two-year state budget.

Rep. David Trahan, a Waldoboro Republican and the moving force behind the creation of the oversight agency, could barely contain his anger during a Friday afternoon meeting of the Legislature’s Appropriations Committee. The panel that holds the purse strings of state government convened a joint session with the Health and Human Services Committee to obtain further information from Chase on the ongoing DHS financial probe.

Meanwhile, Rebecca Wyke, commissioner of the Department of Financial and Administrative Services, expressed concern that the state’s inability to track the missing money could precipitate a downward reclassification of Maine’s credit rating by Wall Street bonding firms.

Speaking to reporters Friday afternoon, Trahan and other Republicans claimed the Department of Human Services was in disarray and that a legislative subcommittee must be created to conduct a full-blown investigation of the agency’s finances with assistance from an external auditing firm.

The Republicans also took aim at Chase whom they accused of “apparent laxity” for not reporting the situation to the Legislature when it became apparent there were accounting problems over a five-year period.

Chase is a former Democratic state representative who, since 1997, has been elected and re-elected to her post by the Democratically controlled Legislature.

The unfolding events, Trahan said, should be a signal to the administration that they can no longer afford to ignore the need for the OPEGA program as a necessary tool to extract accountability from state agencies managing hundreds of millions of dollars.

“What we are learning now about the mismanagement of federal funds administered by DHS strengthens our resolve to get OPEGA funded in the [governor’s] Part II budget,” he said. The fact that this problem has persisted for five years suggests oversight by the state auditor’s office is not enough.”

Officials with the Baldacci administration disagreed, arguing that the money problems at DHS reinforce the governor’s decision to overhaul the department by creating a new agency combining DHS with the Department of Behavioral and Developmental Services.

“The efforts by staff at DHS and the State Controller’s Office to account for how $19 million in federal TANF funds were expended in the past is another indication of the need to reorganize DHS and strengthen accountability,” Baldacci said in a prepared statement. “That reorganization will emphasize efficiency and strict fiscal accountability.”

Sen. Mary Cathcart, an Orono Democrat who serves as Senate chairwoman of the Appropriations Committee, said she was confident the state auditor and the Baldacci administration would get to the root of the problem of the missing funds, which Chase described as unaccounted for rather than misappropriated. Republicans, she implied, needed to assume a more deliberative approach to the investigation.

“I don’t see any reason to panic over it,” Cathcart said. “I think we need to follow the money and make sure DHS and all the departments institute really sound accounting practices if they don’t have them now.”